Helping Doctors Become Cost-Conscious

When doctors see the costs of the tests they order, they often cut back on them, saving money. But is it good for health?

Doctors rarely see the price of the laboratory tests they order for their patients. But these tests can add up, as anyone who has seen a medical bill can tell you.

A six-month study at Johns Hopkins Hospital in Baltimore found that when doctors see the cost of the tests they order, they order fewer of them and sometimes switch to less expensive ones, saving money and lowering health care costs.

Some of the savings stemmed from substituting less expensive tests for more expensive ones.

The study authors assumed that this reduction in cost was the result of reduced waste — the elimination of unnecessary tests, rather than rationing of care. But the study did not monitor whether the quality of patient care was lower with the change to fee-conscious testing. More research will be needed to determine whether health outcomes are affected.

ADVERTISEMENT

The researchers started by listing the hospital's 35 most commonly ordered tests, and its 35 most expensive ones. Of these, 61 tests were finally included in the study. Over a six-month period, doctors saw the prices of 31 tests on screen while they were ordering them (the active group). The other 30 tests (the control group) appeared on screen without price tags.

There was a 9% decrease in the number of tests ordered from the active group and a 6% increase in those ordered from the control group during the study period.

Some of the savings stemmed from substituting less expensive tests for more expensive ones. For example, doctors tended to replace the most comprehensive metabolic panels, a blood test of 14 separate values for kidney function, liver function, and electrolyte and fluid balance, with a basic panel of seven separate blood tests that did not include liver function. Apparently, after seeing the cost of the comprehensive panel, doctors felt that the basic panel would be appropriate for many more patients.

Figures for all 61 tests suggested that the hospital saved over $400,000 during these six months, compared to the previous six months when no price information was displayed for any of the tests.

The study shows that when doctors keep one eye on price, they practice medicine differently and more inexpensively. What it doesn't show is whether or not this is better medicine. And whether the savings will be reflected in health insurance premiums or pocketed as profits by executives.